Okay, I'm trying to do this from memory so bear with me.

While you have the yellow lightning:
From the area with the water filled bottom head up the stairs to the left and go through the door.
Pass through the dark area until you get to a regularly lighted area (the katz and shop are here).
There should be a door on the southern wall that is blocked with a yellow spark. Get rid of it and head into the next area (I think it's another dark room).
When you exit you should be on a ledge above the water room.
Climb down the ladder on the right and proceed further right.
You should get a small cutscene which focuses on a device suspended by rope.
Go back and switch your ring back to the normal fire.
Come back to this area and use the ring on the rope to drop the device on to the machine below.
I believe you should have raised the lightning rod on a similar device before so that you could enter the water.
Head back to that device and deactivate it.
Now head to the machine at the right side of the water room that you dropped the device on.
Activate the device and you should now be able to do the block puzzle in the room with the katz (remember to change back to the yellow lightning)
Afterwards you can make your way down the ramp and to the south to where the red lightning is.

Sorry if any of this is inaccurate, like I said, I'm recalling it from memory.